Five companies will compete this year for the Inman Innovator Award in the alternative business model category. The 2004 finalists are HouseRebate, InSight Realty, Catalist Homes, iPayOne.com and ForSaleByOwner.com.
HouseRebate has harnessed the power of technology and the Internet to offer home buyers and sellers real estate services at lower-than-traditional costs. The San Diego-based company offers buyers a 1 percent rebate on a home purchase, and offers a 4.5 percent commission rate for home-sale services. Buyers can search for homes through the company’s Web site, and sellers can have their homes listed on the Multiple Listing Service and Realtor.com.
InSight Realty offers a flat-fee listing service for home sellers. For-sale homes will appear in the local MLS, as well as Realtor.com. Home sellers pay a flat fee to list with InSight Realty and only pay a buyer’s agent commission if the buyer uses an agent.
Catalist Homes charges home sellers a 3 percent sales commission for full-service representation, marketing and MLS exposure, including a 1.5 percent buyer-side co-op commission split. Its agents are compensated with a combination of salary and commission. The company is led by a think tank of commercial realty giants who’ve watched technology facilitate the growth of sophisticated buyer databases that by 1999, contained the names of all buyers most likely to purchase multimillion-dollar commercial properties. The company believes Internet-accessible MLS listings will similarly impact residential buyer’s agent commissions.
IPayOne is a discount real estate brokerage based in Carlsbad, Calif. Most iPayOne listings are structured with a 1 percent total commission, and the business model is designed so that the company can represent both the buyer and seller. Prospective buyers who work through iPayOne are pre-qualified at no charge. The buyers work through the company to present offers to iPayOne sellers, and when an offer is accepted, the transaction carries a 1 percent total commission.
ForSaleByOwner.com provides an online marketplace for do-it-yourself home buyers and sellers, and distributes 1 million FSBO magazines across real estate markets in 20 states. In 2003, the company added a mortgage brokerage service to its operations, as well as its own online auto marketplace that connects car buyers and sellers, and a service that targets home builders who wish to sell their homes without an agent.
The most innovative real estate and mortgage industry companies will be honored at Real Estate Connect, July 28-30 in San Francisco. Real Estate Connect brings together the top leaders from the real estate industry, including mortgage lenders, technology firms, industry analysts and news media.
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